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Let's Thank the NAR and the Bankers

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September 01, 2008 – Comments (6)

LOUISVILLE, Ky. — With mortgage foreclosures throwing hundreds of families out of their homes here each month, dismayed school officials say they are feeling the upheaval: record numbers of students turning up for classes this fall are homeless or poor enough to qualify for free meals.

“We’re seeing a lot more children in poverty,” said Lauren Roberts, spokeswoman for the Jefferson County school system, a 98,000-student district that includes Louisville and its suburbs.

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So this is the "American dream?" I don't want to absolve everyone of their stupid financial decisions, but let's tell the truth: the hucksters in the National Association of Realtors who conned these people into believing [[ A) home prices don't ever go down B) they deserve the "American Dream" NOW ]] should get a public flogging for what they've done to America. They lit the fire and poured gas on it with every monthly press release. David Lereah and Larry Yun: take a look around and think about what your selfish shilling has done.

Let's also remember the greedy, idiotic "bankers" out there who booked "profits" on ridiculous estimates of what these mortgage-backed atrocities were worth, lined their pockets in real time based on false assumptions about the future, and disappeared into the woodwork with millions.

As for easy Al Greenspan, who never met an interest rate he didn't think needed cutting, he's beyond help. He still doesn't know enough to know when he was lucky (not smart) and still claims his easy money policies had nothing to do with the biggest asset bubble in the history of the planet. Maestro of denial.

This bubble was no different from England's South Sea bubble, just a couple of hundred years later.

6 Comments – Post Your Own

#1) On September 01, 2008 at 10:48 AM, TDRH (99.49) wrote:

Personally, from what I have read  I blame NAHB as much as the other groups.   They promoted the idea of reducing the downpayment requirement for loans that could be resold to Fannie and Freddie to 10% then to 3% and in the end they were promoting no downpayment.   This let the genie out of the bottle, shifted demand for housing, and there is only one way to get it back in and that is a painful corrective cycle.

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#2) On September 01, 2008 at 10:49 AM, TDRH (99.49) wrote:

Personally, from what I have read  I blame NAHB as much as the other groups.   They promoted the idea of reducing the downpayment requirement for loans that could be resold to Fannie and Freddie to 10% then to 3% and in the end they were promoting no downpayment.   This let the genie out of the bottle, shifted demand for housing, and there is only one way to get it back in and that is a painful corrective cycle.

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#3) On September 01, 2008 at 11:32 AM, anchak (99.86) wrote:

Seth....Its very very unfortunate. But lot of this really starts with governmental/monetary policy as James pointed out. The "easy-money" policy and the unlocked liquidity from housing helped Greenspan/Bush et al ....show economic growth - thus continuing something which should only have been a temporary measure post the 911 disaster.

Once you let the system run unprotected - vagaries start showing up - and there are no lack of vultures anywhere, under any circumstances.

The comment James made - let me share a simple anecdote, some of the products which Fannie, Freddie did , has been doing etc ( The elimination of DAP for FHA - is a good step) - banks wouldn't even do for their own balance-sheet lending. Different story of course is that their investment arms happily bought and marketed/packaged these for sale in the secondary market.

This is a fact - and even Fannie,Freddie officials were taken aback when they learnt of this trend.

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#4) On September 01, 2008 at 3:01 PM, lquadland10 (< 20) wrote:

Will Ron Paul Bring in the Amero or will it be Barr? Will everyone turn to him to get us out of this mess. The IMF changed into what

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#5) On September 01, 2008 at 8:21 PM, TDRH (99.49) wrote:

Going forward, loans will need to require a downpayment, or assets to hold in case of loss.  This will prevent jingle mail and walk aways by businesses borrowing money.   Historically this is how credit worked.  For some reason the entire banking industry turned a blind eye at the same time and went for the money.  Those days are done   Painful corrections ahead, not just for banks, but for private equity firms as well. 

Long term this is not a bad thing, short term it is going to hurt  a great deal.   I currently rent, and in boom markets, I am looking for home prices to overshoot the bottom as much as they overshot the top.

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#6) On September 01, 2008 at 8:21 PM, TDRH (99.49) wrote:

Going forward, loans will need to require a downpayment, or assets to hold in case of loss.  This will prevent jingle mail and walk aways by businesses borrowing money.   Historically this is how credit worked.  For some reason the entire banking industry turned a blind eye at the same time and went for the money.  Those days are done   Painful corrections ahead, not just for banks, but for private equity firms as well. 

Long term this is not a bad thing, short term it is going to hurt  a great deal.   I currently rent, and in boom markets, I am looking for home prices to overshoot the bottom as much as they overshot the top.

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